Starbucks "buy," target price reduced - update

16.11.07 - McAdams Wright Ragen

NEW YORK, November 16 (newratings.com) - Analyst Dan Geiman of McAdams Wright Ragen reiterates his "buy" rating on Starbucks Corp (SBUX). The target price has been reduced from $40 to $34.

In a research note published this morning, the analyst mentions that the company has posted its F4Q07 EPS in-line with and total net revenues ahead of the estimates. Starbucks? US traffic declined during the quarter, reflecting steady deterioration in the US business, the analyst says. The company?s operating margins were short of the estimates due to a rise in cost of sales, as a result of inflation in dairy costs and an adverse shift in sales, McAdams Wright Ragen adds.